Light's general ledger is the central accounting system where all financial transactions are recorded. This article explains the ledger structure, how documents flow through it, and its relationship t...
Last updated Feb 18, 2026 · 4 min read
The general ledger (GL) is the master record of all financial transactions:
The GL is where AP invoices, AR invoices, payments, journal entries, and other documents ultimately post as transactions.
The ledger organizes transactions by account type:
Asset Accounts - What you own (1000-1999)
Liability Accounts - What you owe (2000-2999)
Equity Accounts - Owner's stake (3000-3999)
Revenue Accounts - Money earned (4000-4999)
Expense Accounts - Money spent (5000-5999)
The chart of accounts is your company's GL structure. All posting flows through these accounts.
Ledger accounts can be organized hierarchically:
Parent accounts - Summary level (e.g., "Expenses")
Sub-accounts - Detail level (e.g., "Salaries", "Rent", "Utilities")
Reporting rolls up from sub-accounts to parents, allowing both detailed and summary views.
Transactions in the ledger record the actual debit and credit:
Components:
Transactions follow the fundamental equation: Debits = Credits (double-entry bookkeeping)
Financial documents flow through Light and post to the ledger:
Domain modules create documents:
Documents are drafted - Created in DRAFT status, can be edited freely
Documents are posted - Status changes to POSTED, generates GL transactions
Transactions become immutable - Once in the ledger, they cannot be changed (only reversed)
Reporting pulls from ledger - Reports query GL transactions for financial data
When posting a document in a foreign currency:
Original amount - The transaction's original currency (e.g., 1,000 EUR)
Local amount - Converted to company entity's local currency using daily rates
Group amount - Converted to corporate group currency for consolidated reporting
Light stores all three amounts, allowing reporting in any currency.
Tax calculations occur during posting:
Tax is automatically calculated during posting and posted to dedicated tax accounts.
Advanced ledger account capabilities:
Account types - Asset, Liability, Equity, Revenue, Expense, etc.
Account categories - For reporting (Operating Expenses, COGS, etc.)
Reconciliation accounts - For clearing (Accounts Payable offset, Accounts Receivable clearing)
Parent-child relationships - For hierarchy and roll-up reporting
Active/Inactive - Archive accounts no longer in use
Reporting codes - For regulatory reporting (GAAP, IFRS, tax codes)
When documents post, several rules apply:
Period must be open - Cannot post to a closed accounting period
Required fields - All document fields must be complete before posting
GL accounts must exist - All accounts referenced must be in the chart of accounts
Amounts must balance - Total debits must equal total credits
Document type rules - Certain document types have specific posting requirements
If any rule is violated, posting fails with an error message.
Document status affects GL interaction:
DRAFT - No GL impact. Can be freely edited.
POSTED - GL transactions created. Immutable. Cannot edit directly.
PARTIALLY_CLEARED - Some GL entries have been cleared/matched. Cannot modify without reversing first.
CLEARED - All GL entries have been cleared/matched.
ARCHIVED - Removed from active lists but remains in GL.
The ledger is immutable by design:
This prevents fraud and ensures financial data integrity.
Transactions in the ledger can be "cleared" as part of reconciliation:
Clearing links transactions but doesn't modify them—they remain as posted.
Financial reports pull directly from the ledger:
Reports are always current and reflect the latest posted transactions.
Each company entity has its own ledger:
Reports can be generated at entity level or consolidated across the group.
The ledger is organized into accounting periods:
Periods control when transactions can be posted and when closing entries are created.
Light's ledger includes:
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